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1974-18 Authorizing Issuance of $4M General Obligation Bonds7 4 '1 ORDINANCE NO. _ AN ORDINANCE of the Kodiak Island Borough, Alaska, authorizing the issuance of $4,000,000 princi- pal amount of general obligation refunding bonds of the borough for the purpose of pro- viding part of the funds necessary to refund certain of the borough's outstanding general obligation bonds; providing and authorizing the purchase of certain obligations with the proceeds of the sale of such refunding bonds and certain moneys in the bond redemption fund of the borough securing such bonds to he refunded and for the use and application of the moneys to be derived from such investments; providing for the. redemption of the outstanding bonds to be refunded; providing the date, form, terms, maturities and covenants of said refunding bonds to be issued and for unlimited tax levies to pay the principal thereof and interest thereon; and confirming the sale thereof. WHEREAS, the Kodiak Island Borough, Alaska (hereinafter called the "Borough "), now has outstanding its general c'hligat on bonds in the aggregate principal amount of $4,000,000 issued under date of August 1, 1972 (hereinafter called the "Outstanding Bonds "), which bonds mature on August 1 in each of the following years in the following amounts and bear interest as follows: Interest Interest Years Amounts Rates Years Amounts Rates 1974 $115,000 6.75% 1984 $210,000 5.70% 1975 1976 120,000 6.75% 1985 225,000 5.80% 1977 130,000 6.75% 1986 240,000 5.908 1978 140,000 6.75% 1987 255,000 6.00% 150,000 6.75% 1988 270,000 6.101 1979 160,000 6.75% 1989 285,000 6.10% 1980 170,000 6.75% 1990 • 300,000 6.10% 1981 180,000 6.75% 1991 320,000 6.10% 1982 190,000 5.60% 1992 340,000 5.501 1983 200,000 5.60% WHEREAS, the proceedings of the Assembly of the Borough authorizing the issuance of the 1972 Bonds provide that the Borough may call such bonds for redemption on August 1, 1982, or on any interest payment date thereafter, at par plus accrued interest to date of redemption; and WHEREAS, after due consideration it appears to this Assembly that the Outstanding Bonds may be refunded by the issuance and sale of the general obligation refunding bonds of the Borough authorized herein (hereinafter called the "Refunding Bonds ") so that a substan- tial saving to the Borough and its taxpayers will be effected by the issuance of the Refunding Bonds and the redemption of the Outstanding Bonds on August 1, 1982; and WHEREAS, in order to effect such refunding in the manner that will be most advantageous to the Borough and its taxpayers, it is hereby found necessary and advisable that certain "Acquired Obligations" (hereinafter identified), bearing interest and maturing at such time or times as necessary to pay the principal of and interest on the Outstanding Bonds as the same shall become due and to so redeem the Outstanding Bonds, be purchased out of the proceeds of sale of the Refunding Bonds and moneys in certain bond redemption funds of the Borough. NOW, THEREFORE, BE IT RESOLVED by the Assembly of the Kodiak Island Borough, Alaska, as follows: Section 1. For the purpose of providing part of the moneys required to pay the principal of and interest on the Outstanding Bonds coming due to and including August 1, 1982 and to redeem and retire on August 1, 1982 the Outstanding Bonds maturing after said date, the Borough shall issue the Refunding Bonds in the aggregate principal amount of $4,000,000. The Refunding Bonds shall be dated April 1, 1974, shall be in the denomination of $5,000 each, shall be numbered, mature August 1, and shall bear interest payable semiannually on the first days of February and August of each year (commencing August 1, 1974) from date of issue as follows: -2- 1 1 1 I 2 I 5 '1 Bond Nos. Years Amounts Interest Rates 1 -16 1974 17 -42 1975 $130,000 5.00% 43 -70 1976 140' 5.008 100-129 71 -99 1977 145,000 5.0o% 145,000 130 -160 1978 150,000 5.00% 161 -192 1980 155,000 5.00% 194 -227 1981 165,000 5.008 228 -262 1982 170,000 5.258 263 -299 1983 175,000 5.25% 300 -343 1984 185,000 5.25% 344 -390 198 220,000 5.5% 391 -440 1986 235,000 5.25% 441 -493 1987 250,000 5.25% 494 -548 1988 265,000 5.40% 549 -606 19 275,000 5.50% 607 -667 1990 790,000 5.55% 668 -732 19 305,000 5.60% 733 -800 1992 325,000 5.65% 340,000 5.70% Both principal of and interest on the Refunding Bonds shall be payable in lawful money of the United States of America at the main office of Central Bank and Trust Company, Denver, Colorado. Suction 2. The Borough hereby r , Y � ryes the right to redeem any or all of the Refunding Bonds outstanding in whole, or in part in inverse numerical order. at t e following • o- lowing rimes and a t f the _1:•,aing prices, expressed as a percentage of the principal amount of bonds to be redeemed, plus accrued interest to the dace of redemption: On February 1 and August 1, 1983 at 101 On February 1 and August 1, 1984 at 100 -3/4 On February 1 and August 1, 1985 at 100 -1/2 On February 1 and August 1, 1986 at 100 -1/4 On February 1, 1987 and on any interest payment date thereafter at 100. Notice of any such intended redemption shall be given by one publication thereof in a financial journal of general circulation in the city of New York, New York, not more than 40 nor less than 30 days prior to such redemption date and by mailing a like notice at the same time to Marshall and Meyer, Incorporated, at its main office in Seattle, Washington, and to E. F. Hutton and Company, Inc. at its main office in Denver, Colorado, or to the successor or suc- cessors in business of said firms, it any, at its or their main office. Interest_ on any.Refunding Bond or Bonds so called for redemption shall cease on such redemption date unless the same are not redeemed upon presentation made pursuant to such call. - 3- 1 In addition to such publication and mailing the Borough shall also mail notice of any such intended redemption to Standard & Poor Corporation and Moody's Investors Service, Inc., New York, New York, or to their business successors, if any. The mailing of such notice shall not, however, be a condition precedent to the call of any of the Refunding Bonds for redemption, 'and failure to give such notice shall not affect the right of the Borough to redeem the Refunding Bonds called for redemption in the manner set forth in the preceding paragraph. Section 3. The Refunding Bonds shall be in substantially the following form: NO. r, 2 UNITED STATES OF AM•IERICA STATE OF ALASKA S5,000 KODIAK ISLAND BOROUGH GENERAL OBLIGATION REFUNDING BOND, 1974 The Kodiak Island Borough, Alaska (hereinafter called i-he "Rory t, , ") , hPrphy ackr.nwledgea itself to owe and for value received promises to pay to bearer on the first day of August, 19, the principal amount of FIVE THOUSAND DOLLARS together with interest thereon at the rate of % per annum payable on the first days of February and August of each year from date of issue (commencing August 1, 1974) upon presentation and surrender of the attached interest coupons as they severally become due. Both principal of and interest on this bond are payable in lawful money of the United States of America at the main office of Central Bank and Trust Company, Denver, Colorado. The Borough has reserved the right to redeem any or all of the outstanding bonds of this issue in whole, or in part in inverse numerical order, at the following times and at the following prices, expressed as a percentage of the principal amount of bonds to be redeemed, plus accrued interest to the date of redemption: -4- On February On February On February On February On February interest 1983 at 101 1984 at 100 -3/4 1985 at 100 -1/2 1986 at 100 -1/4 any ereafter at 100. 1 and August 1, 1 and August 1, 1 and August 1, 1 and August 1, 1, 1987 and on payment date th Notice of any such intended redemption shall be given by one publication thereof in a financial journal of general circulation in the city of New York, New York, not nore than 40 nor less than 30 days prior to such redemption date and by mailing a like notice at the same time to Marshall and Meyer, Incorporated, at its main office in Seattle, Washington, and to E. F. Hutton & Company, Inc., at its main office in Denver, Colorado, or to the successor or successors in business of said firms, if any, at its or their main office. Interest on any bond or bonds so called for redemption shall cease on such redemption date unless the same are not redeemed upon t1 presentation made pursuant to such call. This bond is one of an issue of 800 bonds of like amount, date and tenor except as to number, rate of interest and date of maturity in the aggregate principal amount of $4,000,000, which bonds are issued for the purpose of providing part of the moneys necessary to refund outstanding general obligation bonds of the Borough in the principal amount of $4,000,000. The bonds of this in accordance with the applicable statutes of refunding issue are issued under and provisions of the'Constitution and the State of Alaska and ordinances duly passed by the Borough Assembly. The Borough hereby irrevocably covenants that it will levy taxes annually upon all the taxable property in the Borough without limitation az to rate or amount and in amounts sufficient, with other moneys legally available therefor, to pay the principal or and interest on the bonds of this issue as the same shall become due. The full faith, credit and resources of the Borough are hereby irrevocably -5- 7 '1 "1 ATTEST: } Borough Clerk 1 2 • pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. It is hereby certified that all acts, conditions and things required to be done precedent to and in the issuance of this bond have happened, been done and performed and that the total indebtedness of the Borough, including this bond and the bonds of this issue, does not exceed any consti- tutional or staturory limitation. IN WITNESS WHEREOF, Kodiak Island Borough, Alaska, has caused this bond to be signed by the Mayor of the Borough, to be attested by its Clerk, the seal of the Borough to be impressed hereon and the interest coupons attached hereto to be signed with the facsimile signatures of said officials this first day of April, 1974. KODIAK ISLAND BOROUGH, ALASKA By l �: �'�;,.1 L L am. "� Borough Mayor The interest coupons attached to the Refunding Bonds shall be in substantially the following form: NO. $5,000 r On the first day of , 19 the Kodiak Island Borough, Alaska, will pay to bearer at the main office of Central Bank and Trust Company, Denver, Colorado, the amount shown hereon in lawful money of the United States of America, said amount being the interest due that date on its general obligation refunding bond dated April 1, 1974, and • numbered -6- 1 1 a , 2'1 ; ATTEST: -7- KODIAK ISLAND BOROUGH, ALASKA By 11) 8 rough Mayor Borough Clerk Section 4. The Refunding Bonds shall be signed in the corporate name of the Borough by the Borough Mayor and the Borough Clerk. Each of the interest coupons attached thereto shall be signed with the facsimile signatures of said officials. Section 5. The Borough hereby irrevocably covenants that for as long as any of the Refunding Bonds are outstanding it will make annual levies of ad valorem taxes without limitation as to rate or amount. upon all the property within the Borough subject to taxation which, with other moneys legally available t will be su :icient iil dltNUllt t0 d p�y the principal of and interest on the Refunding Bonds as the same shall become due. The full faith, credit and resources of the Borough are hereby irrevocably pledged for the annual levy and collection of such taxes and for the prompt payment of such principal and interest. Section 6. There has heretofore been created a special fund of the Borough known as the "1972 Bond Redemption Fund" (hereinafter called the "1972 Fund "), which Fund is to be drawn upon for the sole purpose of paying the principal of and interest on the Outstanding Bonds. The proceeds cf sale of the Refunding Bonds (exclusive of 1974 General Obligation Bond Redemption Fund hereinafter created) shall be credited to such Fund and used immediately 1 1 I upon the receipt thereof to discharge the obligations of the Borough under Ordinance 72 -7 -0 of the Borough authorizing the issuance of the Outstanding Bonds by providing for the paymc.nt as hereinafter set forth in this section of the principal of and interest on the Outstanding Bonds. The Borough shall discharge such obligations by the use of moneys now held in the 1972 Fund (in an amount not greater than the interest accruing on the Outstanding Bonds from their last interest payment date to the date of delivery of the Refunding Bonds to the initial purchaser thereof), and by the purchase of certain obligations of the United States government, or agencies thereof, ( "Acquired Obligations), bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide for the payment of: .(a) Interest on the Outstanding Bonds which will become due and payable on or before August 1, 1982. (b) The principal of the Outstanding Bonds which will mature on or before August 1, 1982. (c) The redemption price payable on August 1, 1982 for the principal of the Outstanding Bonds maturing after that date. Such Acquired Obligations are set forth in Schedule A -1 attached to this Ordinance and incorporated by reference herein. Such Acquired Obligations shall be purchased at a yield not greater than 5.4468% per annum; provided, however, that a sum not greater than $ 666,685.62 may be used to acquire Acquired Obligations at the current market price. Such money and Acquired Obligations shall be irrevocably deposited with Seattle -First National Bank, Seattle, Washington, (hereinafter called the "Refunding Agent "). Any amounts described in subparagraphs (a) through (c) of this section which are not provided for in full by such money and the purchase and deposit of Acquired Obligations described in this section shall be provided -8- 2 4 3 for by the irrevocable deposit of the necessary amount out of the proceeds of sale of the Refunding Bonds or any other moneys of the Borough legally available therefor with the aforesaid Refunding Agent. Section 7. The Borough hereby - "' -- irrevocably calls for redemption on August 1, 1982 the Outstanding Bonds maturing after such date in accordance with the provisions of Ordinance No . of the Borough authorizing the redemption and retirement of the Outstanding Bonds prior to their fixed maturities. Said call for redemption shall he irrevocable after the delivery of the Refunding Bonds to the initial purchasers thereof. The Refunding Agent, acting in concert with the Borough Clerk, is hereby authorized and directed to provide for the giving of notice of the redemption of the Outstanding Bonds in accordance with the applicable provisions of said ordinance. The Refunding Agent is hereby authorized and directed to pay to the Borough Clerk, or, at the direction of the Clerk, to the paying agents for the Outstanding Bonds, sums sufficient to pay, when due, the sums specified in subparagraphs (a) through (c) of Section 6 of this Ordinance. All such sums shall be paid from the moneys and Acquired Obligations deposited with said Refunding Agent pursuant to the previous section of this ordinance, and the income therefrom and proceeds thereof. All moneys and Acquired Obligations deposited with said Refunding Agent and any income thereofrom shall be deemed assets of the 1972 Fund and shall be held, invested (but only at the direction of the Borough Clerk) and applied in accordance with the provisions of this ordinance and with the laws of the State of Alaska for the benefit of the Borough and the holders of the Outstanding Bonds. All monies held by the Refunding Agent pursuant to this ordinance, after August 1, 1982, shall be paid to the Borough. -9- Section 9. In the event - The Borough will take such actions as are found necessary to see that all necessary and proper fees, compensation and expenses of the Refunding Agent for the Outstanding Bonds shall be paid when due. The proper officers and agents of the Borough are directed to obtain from the Refunding Agent an agreement setting forth the duties, obligations and responsibilities of the Refunding Agent in connection with the redemption and retirement of the Outstanding Bonds as provided herein and stating that such provisions for the payment of the fens, compensation and expenses of such Refunding Agent are satisfactory to it. In order to carry out the purposes of the preceding section of this ordinance and this section, the Borough Mayor and Clerk are authorized and directed to execute and deliver to Seattle -First National Bank, Seattle, Washington, a copy of such agreement when the provisions of it have been fixed and determined. Such agreement, when finally executed, shall be marked "Exhibit A ", shall be attached to this ordinance and by this reference thereto is hereby made a part of this ordinance. Section 8. There is hereby created a special fund of the Borough to be known as the "1974 Fund," which fund shall be drawn the principal of and interest on General Obligation Bond Redemption upon for the sole purpose of paying the Refunding Bonds as the same shall become due. All accrued interest received from the sale of the Refunding Bonds shall be paid into the 1974 General Obligation Bond Redemption Fund. that money and /or direct obligations of the united States of America, and /or obligations guaranteed by the United States of America, maturing at such time or times and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire the Refunding Bonds in accordance with their terms, are set aside in the 1974 General Obliga- tion Bond Redemption Fund of the Borough to effect such redemption and 1 ? 1 ; retirement, and such moneys and the principal of and interest on such obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the 1974 General Obligz Bond Redemption Fund for the payment of the principal of and interest on the Refunding Bonds, and the Refunding Bonds and the coupons appurtenant thereto shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive the moneys so set aside and pledged, and the Refunding Bonds and such coupons shal. be deemed not to be outstanding hereunder. Section 10. The Borough hereby covenants that it will not make any use of the proceeds of sale of the Refunding Bonds and any other funds of the Borough which may be deemed to be proceeds of such Refunding Bonds pursuant to Section 103(d) of the Internal Revenue Code and the applicable Regulations thereunder which, if such use had been reasonably expected on the date of delivery of the Refunding Bonds to the initial purchasers thereof, would have caused the Refunding Bonds to be 'arbitrage bonds' within the meaning of said section and said regulations. The Borough will comply with the requirements of subsection (d) of Section 103 of the Internal Revenue Code and the applicable regulations thereunder throughout the term of the Refunding Bonds. This Assembly hereby finds and determines that the issuance and sale of the Refunding Bonds at this time will effect a saving to the Borough and its taxpayers. In making such finding and determina- tion this Assembly has given consideration to the interest to the fixed maturities of the Refunding Bonds and'the Outstanding Bonds being refunded, the costs of the issuance of the Refunding Bonds and the known earned income from -the investment of the proceeds of sale of the Refunding Bonds pending redemption of the Outstanding Bonds. This Assembly hereby further finds and determines that the moneys and Acquired Obligations to be deposited with the Refunding 1 Agent for the Outstanding Bonds in accordance with Section 6 of this resolution will discharge and satisfy the obligations of the Borough under Ordinance No. 72 -7 -0 authorizing the issuance of the Outstanding Bonds and the pledges, charges, trust, covenants and agreements of the Borough therein made or provided for as to said Outstanding Bonds, and that said Outstanding Bonds shall no longer be deemed to be outstanding under said ordinance immediately upon the deposit of such moneys and the Acquired Obligations with the Refunding Agent. Section 11. The written offer of E. F. Hutton & Company, Inc. and Marshall and Meyer, Incorporated, dated' March 1, 1974, to purchase the Refunding Bonds at the price specified in such offer, and under the terms and conditions thereof as provided in said offer and in this ordinance is hereby in all respects accepted and confirmed. The proper Borough officials are hereby authorized and directed to do everything necessary for the prompt execution and delivery of the Refunding Bonds to said purchaser and for the proper application and use of the proceeds of sale thereof. Section 12. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the Borough shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed seperable from the remaining covenants and agreements in this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. Section 13. This ordinance shall become effective immedi- ately upon its passage. ADOPTED by the Assembly of the Kodiak Island Borough, Alaska, at a regular meeting thereof held this day ofpj/ , 1974. KODIAK ISLAND BOROUGH, ALASKA By C Presiding Officer ,1 1.1x/.4.4/ orough Mayor -12 1.1x � .4/ l ATTEST: • > Borough Clerk Amount CODE: SCHEDULE A -1 ACQUIRED OBLIGATIONS KODIAK ISLAND BOROUGH, ALASKA SECURITIES USED TO FUND ESCROW Interest Rate Description $2,810,000 6.650% FNMA 6/10/82 4,000 7.000% BOND 8/15/81 160,000 7.250% FNMA 6/10/81 151,000 7.500% FLB 7/21/80 141,000 7.150% FLB 7/23/79 132,000 6.250% NOTE 2/15/78 123,000 7.500% FLB 7/20/77 115,000 6.500% NOTE 5/15/76 106,000 6.000% NOTE 5/15/75 112,000 7.250% NOTE 5/15/74 FNMA - Federal National Mortgage Association Debenture BOND - United States Treasury Bonds FLB - Federal Land Bank Bonds NOTE - United States Treasury Notes • Maturity Date 1 1 7 7 1 1 2 4 4 n Norma L. Holt , Clerk of Kodiak Island Borough, Alaska, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Ordinance No. 74 -18 -0 of said Borough, duly adoptod by the Borough Assembly and approved by its Mayor at a regular meeting of said Assembly held on the 2 7th day of April 1974. Borough Cler